The Legal Affairs Committee of the Council of State in Switzerland decided last Monday 13th November to propose a parliamentary initiative on the responsibility of Swiss companies to respect human rights. The decision came after the Committee in the Swiss Parliamentary Upper House was required to present a position regarding theResponsible Business Initiative (RBI). This citizens’ initiative aims at changing the Constitution to introduce mandatory Human Rights Due Diligence obligations for companies based in Switzerland.

With a broad majority of votes (eight to one, one abstention and 3 excuses), the Committee decided to propose an indirect counter-proposal to the RBI in the form of a parliamentary initiative on the responsibility of Swiss companies to respect human rights abroad. The decision adopted did not deliver on the content of such a possible Bill. Nevertheless, the press release published yesterday gave some hints about its objectives and scope, namely that the proposal “should specify at the level of law the main objectives of the Responsible Business Initiative and clarify some formulations of the text which are too open”.

The document goes on to affirm that “this approach will help find a balanced and specific solution which will guarantee the respect for human rights and the protection of the environment by business enterprises abroad”. The proposal will aim at ensuring that the principles contained in the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises and Human Rights are implemented with binding character. The Committee furthermore expressed its intention to examine sanction mechanisms as well as liability for serious human rights violations.

These principles would be specified in the main elements of the future bill:

Mandatory Human Rights Due Diligence: Large companies and Small and Medium Enterprises (SMEs) that are active in risk sectors should be required to conduct human rights and environmental due diligence according to the UNGPs and OECD Guidelines. Risk sectors are to be defined by the lawmaker.

Enforcement: the bill would establish monitoring and sanction mechanisms regarding the obligation to conduct due diligence. Such mechanisms could be sector-specific.

Parent company liability for most serious violations: civil liability of parent companies could be established where a subsidiary causes death or serious bodily harm. Alternatively, corporate criminal liability can be extended to cover the aforementioned wrongdoings.

“The Committee takes seriously the need for legislative action”

The Swiss Coalition for Corporate Justice (SCCJ), the organisation promoting the Responsible Business Initiative, welcomed the Committee’s decision as a first step which “would allow the beginning of a serious debate”. According to the SCCJ, last Monday’s decision means that the Legal Affairs Committee “acknowledges that human rights violations by multinational enterprises based in Switzerland constitute a problem”and that it “takes seriously the need for action by proposing legislative measures”.

In order to proceed, the decision of the Upper House’s Committee needs to be confirmed by its counterpart Committee in the National Council (the Parliament’s lower house). The decision is due to happen in the winter session of this committee in the coming weeks.

Background notes:

The Responsible Business Initiative was filed to the Government last October 2016 with over 120.000 valid signatures (over the threshold of 100.000 signatures required to start the referendum process) and the backing of more than 80 Swiss civil society organisations. The bill will be subject to a referendum where Swiss citizens will cast a vote on the text and on a possible counter proposal presented by the Parliament.

See Press Release by the Swiss Coalition for Corporate Justice in French andEnglish.